June 27 (Bloomberg) -- The U.S. Supreme Court, accepting a
case that will reshape the speech rights of broadcasters, agreed
to decide whether federal regulators are violating the
Constitution by imposing fines for on-air profanities and
nudity.

The justices today said they will review a lower court’s
conclusion that the Federal Communications Commission’s
indecency policy is unconstitutionally vague. The dispute stems
from expletives uttered on two Fox network award shows and from
a scene with a naked woman on ABC’s “NYPD Blue.”

Two appeals court rulings “preclude the commission from
effectively implementing statutory restrictions on broadcast
indecency that the agency has enforced since its creation in
1934,” the Justice Department said in its appeal.

The case gives the high court a chance to issue a sweeping
decision. News Corp.’s Fox and Walt Disney Co.’s ABC say the
court should overturn decades-old rulings that give the FCC more
authority to regulate programming on broadcast stations than on
cable or satellite.

“We are hopeful that the court will affirm the
commission’s exercise of its statutory responsibility to protect
children and families from indecent broadcast programming,”
Neil Grace, an FCC spokesman, said in an e-mail.

Speech Rights

“We are hopeful that the court will ultimately agree that
the FCC’s indecency enforcement practices trample on the First
Amendment rights of broadcasters,” Scott Grogin, a Fox
spokesman, said in an interview.

The lower court “correctly decided that the FCC’s current
indecency enforcement policies are unconstitutional” and the
episode of NYPD Blue was not indecent, Julie Hoover, a
spokeswoman for ABC, said in an interview.

One of the Supreme Court rulings the networks are attacking
is a 1978 decision that said the FCC could take action against a
radio station for airing comedian George Carlin’s “Seven Dirty
Words” monologue during the afternoon. The court said FCC
regulation was warranted because broadcast television and radio
had a “uniquely pervasive presence in the lives of all
Americans” and were “uniquely accessible to children.”

The justices announced they will hear the case as they took
the bench to issue the final opinions of their current nine-month term. They will consider the FCC case in the term that
starts in October.

Temporarily Revived

The case centers on First Amendment issues that the high
court opted not to resolve when it temporarily revived the FCC’s
anti-expletive policy in 2009. Justices in both the majority and
dissent in that case pointed to free-speech concerns about the
crackdown.

The agency began cracking down on broadcasters after
celebrities used vulgar language on three live awards shows in
2002 and 2003. Regulators said in 2004 that for the first time
they would punish broadcasters for so-called fleeting
expletives.

Two of the incidents involved Fox. In one, at the 2002
Billboard Music Awards, Cher referred to critics of her work by
saying, “F-- ‘em. I still have a job and they don’t.”

Nicole Richie used expletives as a presenter on the same
show a year later. “Have you ever tried to get cow s--- out of
a Prada purse?” she said. “It’s not so f---ing simple.”

Indecency Rules

The FCC concluded that the broadcasts violated its
indecency regulations, though the agency said it wouldn’t impose
a fine because the incidents took place before the change in
policy. Federal law lets the FCC impose fines of $325,000 on
each station that airs indecent material between 6 a.m. and 10
p.m.

The 2nd U.S. Circuit Court of Appeals in New York said last
year that the FCC had been inconsistent in the way it applied
its rules. The panel pointed to the FCC’s decision not to take
action over ABC’s airing of “Saving Private Ryan,” a movie
that repeatedly uses the same words.

The appeals court said broadcasters “are left to guess”
whether the use of an expletive will be permitted.

In the “NYPD Blue” case, the FCC is attempting to impose
penalties totaling $1.2 million on more than 40 ABC-affiliated
stations. The disputed episode showed a woman’s buttocks while
she was in the bathroom and then, when a young boy inadvertently
walked in, a frontal view as she covered her breasts and pubic
area.